* Complaint highlights grid ownership dispute
* Hope for negotiated settlement
By Michael Kahn
PRAGUE, Sept 20 (Reuters) - Kosovo's grid operator has accused Serbia of failing to pay transit fees for electricity and not allowing it to allocate sufficient cross-border capacity, the Energy Community said on Monday.
This spurred the Energy Community, which represents eight Balkan states and the European Union, to open a so-called infringement procedure against Serbia, marking the latest development in a dispute between the two countries over ownership and operation of Kosovo's transmission system.
Serbia lost control of Kosovo in 1999 when NATO waged a bombing campaign to halt killings of ethnic Albanians in a two-year counter-insurgency war. Kosovo declared independence in 2008, backed by the United States and most EU countries but not recognized by Serbia.
In its complaint, the Kosovo grid operator said it does not receive compensation for transmission going through its network and is barred from allocating transmission capacity on interconnectors in neighboring Albania, Macedonia and Montenegro.
"We are looking at this case from the perspective of compliance with the Energy Community Treaty, not ownership issues," said Dirk Buschle, legal counsel of the Vienna-based Energy Community, which aims to ensure close cooperation between the EU and the Balkan countries over energy issues.
Serbia has two months to respond after which Belgrade could be found in breach of the Energy Community treaty. Energy Community officials say the door is open for a negotiated solution between the two parties.
The disputes come as officials across the region are working to tie together isolated power markets in the Balkans badly in need of outside investment.
Many power traders see the region as a particularly lucrative one in part because numerous shared borders create trading opportunities, and because they expect a fast pace of future power demand growth.
But barriers such as a lack of transparency and political uncertainty highlighted by the grid dispute between Serbia and Kosovo are limiting growth.
"We still hope to find an agreement acceptable to both sides," Buschle said in a telephone interview. "But the ball is now in Serbia's court." (Reporting by Michael Kahn, Editing by Vera Eckert)